Freshpet, which sells refrigerated pet food via custom refrigerators installed at over 12,500 retail stores, filed on Friday with the SEC to raise up to $100 million in an initial public offering.
Freshpet manufactures and delivers its refrigerated pet food through company-owned "Freshpet Fridges" installed at blue-chip retail chains including Wal-Mart (WMT; 1,600 Fridges), Petco (1,350), PetSmart (PETM; 1,300), Kroger (KR; 970), Target (TGT; 1,150) and Whole Foods (WFM; 200). The company is backed by growth equity from MidOcean Partners, Tyson Foods (TSN), Kayne Anderson Capital Advisors and Chairman Charles Norris.
Revenue increased 38% to $40 million during the six months ended June 30, 2014 as the company increased the number of installed Freshpet Fridges store locations from 9,800 to 12,600. Gross margin expanded 175 bps to 48.7%, which the company expects to rise as it achieves scale. Freshpet's adjusted EBITDA swung positive to $400,000 from a $1.8 million loss during the prior year period. The company held $84 million of debt at quarter-end.
Freshpet's $100 million filing follows the July IPO of pet insurer Trupanion (TRUP; down 13%). The company cites a growing trend of "pet humanization" in the US where owners treat their pets as family members, along with the popularity of fresh, natural and organic food products among US consumers.
The Seacaucus, NJ-based company was founded in 2004 and booked $74 million in sales for the 12 months ended June 30, 2014. Freshpet initially filed confidentially on June 27, 2014. Goldman Sachs and Credit Suisse are the joint bookrunners on the deal. No pricing terms were disclosed.
